Posey's Tips & Tricks
Why Are the Office Web Apps Free?
To try to peel back this mystery, taking a look at the history of Microsoft's free online Web apps can help provide insight.
Over the holiday break a friend asked me why it was that Microsoft 365 is a paid subscription, and yet Microsoft allows you to use its Office Web apps for free. My friend went on to say that it seemed especially perplexing for the Web apps to be free considering that Microsoft incurs development, hosting and support costs associated with the apps.
To the best of my knowledge, Microsoft has never given an official answer as to why the Office Web Apps are free. But I can think of several plausible reasons for the free apps.
My guess is that the reason why Microsoft continues to provide its Office Web Apps for free has changed over time. That’s because the apps have been around for a lot longer than most people probably realize. In fact, the Office Web Apps were introduced way back in 2010 (but they have changed names several times over the years).
Initially, Microsoft’s only Office Web app was Outlook, and that wasn’t free. It was included with Microsoft Exchange Server, which could only be run on premises at the time. Back then, the Outlook Web App (or OWA as it was so often called) would work in a pinch, but it lacked many of the features that had become commonplace in Outlook. One of the Exchange team’s major design initiatives at the time was to figure out a way to improve Outlook Web Access to the point that using it was just as good as using Outlook.
As technology improved and Microsoft continuously made improvements to Outlook Web Apps, the company probably also decided to see if it was possible to create Web versions of its other Office applications. My guess is that these efforts were largely experimental and were designed to test the limits of what could realistically be achieved with a browser. Over time though, Microsoft’s goals seem to have changed.
One of the things that was going on at around the same time was that technology companies were beginning to seriously explore the possibilities of cloud computing. Not coincidently, Microsoft Azure was introduced the same year as the Office Web Apps (2010). Of course back then, Azure barely even resembled what it looks like today. I think that everyone, including Microsoft, was still trying to figure out what role the cloud was going to play going forward. That being the case, it seems logical to assume that the Office Web Apps were being used for two main purposes.
The first of those purposes was to help to develop technology that would eventually be put to work in the Azure cloud. The second purpose was probably to get everyone used to using browser-based applications. Remember, back then hybrid cloud really wasn’t a thing. Most technology companies envisioned a world in which everyone would simply surrender all of their on premises resources and operate solely in the cloud. As such, it isn’t completely unthinkable that the Office Web Apps might have been some sort of social conditioning experiment to see if people would really be accepting of browser-based applications or not.
So what about today? Why does Microsoft continue to make the Office Web Apps freely available to anyone who wants to use them? Once again, I haven’t heard any kind of official explanation from Microsoft, but I do have some ideas.
I think that one reason why Microsoft makes the Office Web Apps available for free is that those apps act as a sort of gateway drug. Even though the Office Web Apps might fully meet the needs of those who only need the most basic Microsoft Office capabilities, they lack a lot of the features found in Office 365. As such, Microsoft may be hoping that some people will start out using the Office Web Apps and then adopt Office 365 later on. This approach really isn’t that uncommon. Just think how many other technology companies offer a free consumer edition of their software.
I think that another reason why Microsoft continues to make the Office Web Apps available for free is to ensure that they do not lose market share to Google. After all, Google makes its productivity suite freely available and if Microsoft did not offer something comparable, a lot of Microsoft customers would probably switch over to the Google platform.
Finally, the existence of the Office Web Apps helps to ensure that the Office document formats remain an industry standard. It gives non-Office users a way of opening Office documents should the need arise. Microsoft offered Office document viewer applications in the past, but those applications were something that had to be downloaded. Being able to use a Web application to open a document is a lot more convenient than having to download a viewer.
Brien Posey is a 21-time Microsoft MVP with decades of IT experience. As a freelance writer, Posey has written thousands of articles and contributed to several dozen books on a wide variety of IT topics. Prior to going freelance, Posey was a CIO for a national chain of hospitals and health care facilities. He has also served as a network administrator for some of the country's largest insurance companies and for the Department of Defense at Fort Knox. In addition to his continued work in IT, Posey has spent the last several years actively training as a commercial scientist-astronaut candidate in preparation to fly on a mission to study polar mesospheric clouds from space. You can follow his spaceflight training on his Web site.